The IRS gave Notice (2018-76) states that client and prospect business meals will continue to be tax deductions under the Tax Cuts and Jobs Act. Which confirms what we expected!
However, under this new IRS guidance, you may deduct 50% of your client and prospect business meals if:
To prove your business meals, follow the two easy steps below:
In the event the receipt is not available, such as with the purchase of hot dogs and drinks at a baseball game while sitting in the stands, make sure to make a written note of the expenditures immediately after the game.
If you charge a business meal to a credit card, the credit card statement provides your proof of payment. When possible, always pay by credit card or write a check so that you have clear proof of payment.
Proof of payment is not proof of what you purchased, so in addition to proof of payment, keep the receipt with the notations as described earlier. With this combination of proof of payment and receipt with notations, you have what we call audit-proof documentation.
We're Here to Help
Get advice from our experienced network of financial managers.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.